Advisory Opinion NO 2012-03

Summary of Request From: Commission Staff
The Advisory Opinion Request seeks clarification regarding the proper application of the Georgia Government Transparency and Campaign Finance Act to factual situations involving campaign expenditures for attorney’s fees associated with the defense of a candidate for statewide office.

Specifically, the request seeks additional guidance from the Commission regarding the treatment of legal fees paid from a campaign for a Georgia candidate for legal fees from a federal investigation that arose from conduct that occurred when the candidate was in federal office.

ADVISORY OPINION

GEORGIA GOVERNMENT TRANSPARENCY AND CAMPAIGN FINANCE COMMISSION

ADVISORY OPINION
C.F.C. 2012-03 AND C.F.C 2012-05

The Georgia Government Transparency and Campaign Finance Commission (the “Commission”) has received the following requests for advisory opinion from the Commission staff (Request No. 2012-03) and McKenna Long & Aldridge (Request No. 2012-05). Because these requests cover the same issues, the Commission has combined them into one advisory opinion.

QUESTION PRESENTED – NO. 2012-03

Whether a candidate for a Georgia elected office may expend campaign funds from the Georgia campaign for legal fees arising from a federal investigation of conduct that occurred when the candidate was in federal office.

QUESTION PRESENTED – NO. 2012-05

What is the appropriate methodology for evaluating the acceptability of attorney fee expenditures by the state campaign committee of a current or past federal office holder when such costs are clearly made in connection with the candidate’s active campaign for state office, but also bear some relationship to the candidate’s current or past federal position? How should a state campaign committee assess the treatment of particular attorney fee expenditures in factual scenarios where the legal services provided fundamentally relate to the candidate’s run for state elective office, but cannot be cast in a light that is wholly segregated from the candidate’s present or former federal office?

ADVISORY OPINION

The Georgia Government Transparency and Campaign Finance Act (the “Act”) provides that

Contributions to a candidate…shall be utilized only to defray ordinary and necessary expenses…incurred in connection with such candidate’s campaign for elective office….

See O.C.G.A. § 21-5-33(a).

Under Article 1, the Act defines “ordinary and necessary expenses” as including, but not limited to

Expenditures made during the reporting period for office costs and rent, lodging, equipment, travel, advertising, postage, staff salaries, consultants, file storage, polling, special events, volunteers, reimbursements to volunteers, repayment of any loans received except as restricted under subsection (i) of Code Section 21-5-41, contributions to nonprofit organizations, and flowers for special occasions, which shall include, but are not limited to, birthdays and funerals, and all other expenditures contemplated in Code Section 21-5-33.

See O.C.G.A. § 21-5-3(18).
While legal fees are not explicitly listed in the Act’s definition of ordinary and necessary expenses, there are instances where such expenditures could be an “ordinary and necessary expense” in connection with a candidate’s campaign for office. There may also be instances where legal fees would not be an “ordinary and necessary expense” in connection with a candidate’s campaign for office.

The Commission finds that the acceptability of attorney fee expenditures by a state campaign committee of a current or past federal office holder is a fact-specific inquiry that must be determined on a case-by-case basis. The Commission, however, holds that such attorney fee expenditures must be connected to and in furtherance of the campaign. If a complaint is made regarding the acceptability of attorney fee expenditures, a candidate must make a full disclosure to the Commission so that an appropriate decision can be made after a full investigation of the facts.